Ruling States Consumer Rights Preempted by Federal Law
On April 11, 2013, the Florida Supreme Court issued a ruling in McKenzie Check Advance v. Betts, concluding arbitration agreements which preclude consumers from joining a class action lawsuit are valid per federal law and cannot be overturned.
The decision came after Florida’s Fourth District Court of Appeal ruled in McKenzie Check Advance v. Betts that class action bans which payday lending companies put in their consumer contracts were void because they violate public policy. For years, payday lending companies prevented consumers from vindicating their rights under the Florida Deceptive and Unfair Trade Practices Act and the Florida Civil Remedies for Criminal Practices Act by inserting class action bans in their contracts. In an attempt to protect themselves from civil lawsuits, these payday lending companies often included in the loan paperwork language banning consumers from bringing class actions in an effort to seek civil remedies.
Attorneys advocating on behalf of consumers argued that these contracts precluded individuals from access to justice and was a violation of their constitutional rights. The group of attorneys included Theodore Leopold of Leopold Law, P.A.; Clay Yates of Yates & Mancini, LLC; Chris Casper of James, Hoyer, Newcomer & Smiljanich, P.A.; Richard Fisher of Richard Fisher Law Office; and Paul Bland of Public Justice.
Unfortunately, for consumers, the U.S. Supreme Court issued a ruling on April 27, 2011 in AT & T Mobility v. Concepcion which pre-empted the findings of the Fourth District Court and ultimately determined the Florida Supreme Court decision.